144 N.Y.S. 964 | N.Y. App. Div. | 1913
Plaintiff is or was the owner of three-fifths of the stock of Milliken Brothers, Incorporated. That concern was put into bankruptcy and receivers appointed. A committee of creditors was organized representing the defendant banks and a plan for the readjustment of the affairs of the company proposed
The plaintiff concedes that, considered merely as a stockholder, he cannot sue for the injury done to the corporation, but asserts, that as pledgor of the stock he has a cause of action for the injury done to the value of his pledged stock, in consequence of the injury done to the corporation, whereby not only his, but all of the stock, was rendered valueless.
He relies upon Ritchie v. McMullen (79 Fed. Rep. 522). That was a case in equity in which it was sought to subject Eitchie’s interest in pledged stock to the satisfaction of the judgment against him, and he undertook to offset the damage alleged to have been done to him, as owner of the stock, by the pledgees.
The gravamen of Eitchie’s claim was that the pledgees had entered into a conspiracy aimed directly at the particular stock owned by him, the injury to the corporation being merely an incident. The court said, among other things: “It is true that the obligations of the pledgee of stock to the pledgor would not be violated by the pledgee if the stock held in pledge suffered a loss in value through negligence of the pledgee in acting as director of the company or through ill-advised or negligent voting of other stock owned by him. The fact that the pledgee of stock owns other stock in the same company, or is a director or officer therein, does not impose any greater duty upon him in respect to the stock pledged than if he had no relation to the company at all.
“ But if such pledgee use his position as director and his vote
The distinction is clear. For a direct injury to the stock of the pledgor, not common to all stockholders as such, the pledgor may have his action, notwithstanding he is also a stockholder.
For an injury to the corporation, common to all stockholders, the pledgor has no individual right of action although the injury to the corporation may incidentally result in a depreciation of the value of his pledge.
-The order appealed from is, therefore, affirmed, with ten dollars costs and disbursements, with leave to plaintiff to amend within twenty days upon payment of all costs.
Ingraham, P. J., Clarke and Dowling, JJ., concurred.
Order affirmed, with ten dollars costs • and disbursements, with leave to amend on payment of costs.